St. Jude Children's Research Hospital

This blog would not be complete without mentioning St. Jude Children's Research Hospital. When I first really learned about this organization, I was in my first marketing class and I wasn't sure if this was what I should major in. I wanted a business degree and marketing seemed interesting to me but there was a darker strictly about money side of business and marketing that made me consider switching majors.

But this story in my textbook about St. Jude put my doubts to rest. St. Jude is a remarkable organization. "It is the only pediatric cancer research center where families never pay for treatment not covered by insurance. No child is ever denied treatment because of the family's inability to pay." If that wasn't enough, the protocols they have developed helped increase childhood cancer survival rates from less than 20 percent when they opened to 80 percent today. St. Jude was ranked the number 1  pediatric cancer hospital by Parents magazine and the number 1 children's cancer hospital by U.S. News & World Report.

But of course all this care does cost money, and since patients do not have to pay it has to come from somewhere. In the average year 5,700 active patients visit the hospital and the average daily operating costs of St Jude is $1.6 million, most of which is covered by donations. And they are very efficient with these public contributions, 81 cents of every dollar received has supported the research and treatment at St. Jude." This orgnization relies heavily on individual donations but fortunately they also have a long list of corporate partners. This list of partnerships include over 60 companies including AutoZone, Jewelers for Children, Reebok, FedEx, and Target. 

In addition to partnering with companies, there have also been successful cause-related marketing campaigns ran by St. Jude. One of their most famous was "in 2004, St. Jude invited companies to be a part of the Thanks and Giving® campaign, an unprecedented union of celebrities, media retail and corporate partners that asks consumers to 'Give thanks for the healthy kids in your life, and give to those who are not.'”

Sustainability at REI

On Monday, February 28 I went to a talk on Western's campus by Kirk Meyers, Corporate Social Responsibility Manager at REI. In his talk, "Next Generation CSR: Integrating Sustainability to Thrive in a Resource-Constrained World," Meyers talked about the importance of this topic and the efforts currently under way at REI.

The core purpose at REI is "to inspire, educate, and outfit for a litfetime of outdoor adventure and stewardship." And Myers explained that they must align the way they do business with their mission in order for people to believe the company as authentic. Myers went on to say that right now is only the beginning, that sustainability will become the dominant business model because its not only greener but its a smarter way of doing business.

One of the main points to Myers' talk was that companies need to have a unified framework and vision integrating CSR into the business. Business leaders have to understand that sustainability creates value-- that they don't have to choose between the environmental or their finances when making decisions.

An example of this at REI is the way the company ships its goods. Myers said that normally the viewpoint is that to make the most money companies choose whichever transportation method is fastest to increase sales. But that doesn't take into account the environmental impact of those decisions. REI chose to transport their goods by boat through the Panama Canal because it had the smallest carbon footprint. But in addition to the green benefit, this choice also helped to shield REI from exposure to fuel price fluctuations and saved the company over $700,000 in fuel surcharges.

The next step is not an easy one but it is essential. It is difficult for two reasons. First, this means changing business practices that people are accustomed to following and changing the minds of decision makers of what really will be cost effective in the long run. And second, the expectations of customers are rising. As time goes on people are more aware of what constitutes real change and they are better at recognizing attempts that are less than genuine. But that doesn't mean its impossible or that it shouldn't happen. I'll end this post with a quote from Eric Hoffer that Myers shared in his talk:

"In times of change, learners inherit the earth, while the learned find themselves beautifully equipped to deal with a world that no longer exists."

Good News For Nonprofits

A recent article on PhilanthropyJournal.com gives some promising news for nonprofits. Despite the recession Online Giving Grows in 2010. The results of a new study " include 24 months of online giving data from 1,812 nonprofits from the Blackbaud Index of Online Giving."

Online fund raising grew 34.5 percent in 2010 with both large, medium and small sized nonprofits all experiencing double digit growth. Large organizations experienced a 55.6 percent growth, medium sized organizations had 15.9 percent growth and the donations to small organizations grew by 22 percent.

One of the driving forces for this increase is of course the response to the earthquake in Haiti. Compared to 2009, online giving for international affairs groups increased by 130.8 percent. But in addition to that, nonprofits of all missions and causes can be benefited by donors giving online.

These results show the importance of nonprofit organizations being on top of new technology that allows them to be connected to current and future donors.  Having a web 2.0 and social media presence are crucial for nonprofits to grow in this digital age.

"'2010 saw the continued growth in the importance of online fund raising for nonprofit organizations,' Steve MacLaughlin, director of Internet solutions for Blackbaud, says in a statement. 'A recovering global economy, online response for disaster relief, peer-to-peer fund raising, and the role of social media in the nonprofit sector all shaped 2010.'"

Hopefully this is just the start of increased donations in all forms.

Amazon

Amazon.com is my favorite web site when it comes to ordering anything online. The selection is huge so I look there no matter what I’m interested in purchasing, Amazon’s prices have saved me money especially on text books and I have to commend them for their customer service. The order process is straight forward and they effectively communicate so I know exactly when my order will arrive.

But in addition to their selection and customer service I also commend Amazon for its responsible business practices. On the website their is a section called Amazon and Our Planet where it describes the ways Amazon tries to reduce its environmental impact. These include frustration free packaging, environmentally friendly packaging, and  AmazonEncore Publishing which ensures that "physical editions are assembled using recycled and sustainably harvested paper stock that has been certified by the Forest Stewardship Council or the Sustainable Forestry Initiative." 


Also, in times of disaster, customers can make donations to the American Red Cross through Amazon. Through icons located on Amazon's homepage, customers have donated more than $35 million to global relief programs since 2001. 

Another way Amazon customers can help nonprofit organizations is through Amazon Wish Lists. Through this service, people can help organizations by giving them exactly what they are looking for and the right amount of each particular product. And this all done through a payment system that people know to trust as safe and Secure. 


There is also an affiliate marketing program called Amazon Associates. "As associates, organizations place links to Amazon products and services on their websites. For each purchase made through these links, the organization earns up to 15% in referral fees from Amazon.com. It's a great way for nonprofits to earn revenue without asking donors for direct contributions. Plus, donors know that each time they make a purchase through these links, they're helping their favorite nonprofit."

Nonprofit Survival Guide for Hard Times

I recently read an article on About.com by Joanne Fritz entitled Nonprofit Survival Guide for Hard Times. This article contained eight steps that can help organizations get through the tough times like our current recession. The steps are:

1. Don't pull back on fund raising.
Just as companies shouldn't cut back on advertising during a downturn so they don't lose top of mind with customers, Fritz writes that retreating won't help a nonprofit organization. Instead, take the opportunity to focus efforts and establish more personal relationships with donors.

2. Let your donors know that those you help are in more need than ever.
"No matter how a donor may be hurt by an economic downturn, the disadvantaged are damaged far more and have less opportunity to recover."


3. Find the stories that will touch the hearts of your donors.
In these times especially, try to find ways to show the shared humanity between people that need help and current and potential donors.

4. Stay in touch with people who have stopped giving.
In addition to the possibility of recapturing these donors, staying in touch reminds people of what they want to support when they can later afford to donate again. 


5. Find new donors in industries that are still thriving.
Though this is not the case for most, there are some industries that are recession proof and would be great donation candidates. Instead of following the traditional best practices, be proactive and find donors that other organizations haven't reached out to yet.

6. Take the opportunity to lower fund raising costs.
One way to do so is instead of having an expensive event, organizations can go directly to their donors for donations. For example, "Wrap a simple, low-cost mailing around the fact that you are lowering overhead by skipping the event, and ask for a direct gift that will put more services and money into your clients' lives."

7. Cut costs -- sensibly.
This is a time to cut things that lack efficiency and are extraneous and unnecessary. Just make sure to never deviate from the organization's mission of helping those that need it.

8. Take a new look at projects you intend to raise money for.
Though there may be ideas for future spending, this is not the time to use valuable resources. Instead postpone changes until the economic future is a little more certain.

All in all these ideas are great for nonprofits experiencing lean times. Economic downturns make things harder but at the same time they also offer the opportunity for innovation and new ways of doing things. New ways that are make your organization more efficient and more effective at achieving its mission.

A Case for CSR And Ethics

For my Marketing Management and Strategy class I'm reading a textbook entitled Marketing Strategy by O.C. Ferrel and Michael D. Hartline. One of the chapters is on Marketing Ethics and Social Responsibility in Strategic Planning. It lays out the importance of ethics and social responsibility for success in business.

"Firms that choose to take these extra steps concern themselves with increasing their overall impact on society, their local communities, and the environment, with the bottom line of increased goodwill towards the firm, as well as increased profits," writes the authors.

An example in the book is the White Dog Cafe in Philadelphia. Owner Judy Wicks has grown her business from selling coffee and muffins in her home to a restaurant that can seat 200 and grosses $5 million annually. "Wicks pays a living wage to all restaurant employees, even dishwashers; however, most employees at White Dog Cafe make above this amount." What's more is that the restaurant is powered by renewable energy and 10%-20% of profits are donated to White Dog Community Enterprises. This affiliated nonprofit strives to achieve a more socially just and environmentally sustainable local economy in the greater Philadelphia area.

High ethical and responsible standards can benefit firms by attracting employees. A survey conducted by business consulting firm LRN found that 94% of respondents considered it very important to work for an ethical company. And 82% would even take a pay cut to work in an ethical environment.

Corporate Social Responsibility can also benefit companies by increasing employee loyalty. An example where this paid off is for Washington's own Burgerville. It "realized significant cost savings, decreased employee turnover and higher sales after it began to cover 90% of health care costs for all employees who work over 20 hours per week." When employees are proud to work for a company their commitment to achieving high quality standards also increases.

I will end this post with two more quotes from my textbook that show the sales benefits of companies behaving in socially responsible and ethical ways.

"A Cone Cause Evolution study revealed that two-thirds of Americans consider a company's business practices when making purchasing decisions, with 85% claiming that they would switch products or services should a company be revealed to be unethical."

"Research by the brand and marketing agency BBMG revealed that about 3 out of 4 Americans prefer to buy goods and services from firms that are socially responsible and good corporate citizens."

Ban on Donation Apps

Apple's decision to not allow people to donate on the iPhone through charity apps have irritated nonprofits. Stephanie Strom of the New York Times writes that instead of being able to donate directly through an application, "Prospective donors instead are directed out of a nonprofit’s app and to its Web site, which the organizations say makes the process of contributing more cumbersome." Nonprofits argue that donations can be increased if people could use apps directly instead of the current more difficult longer method.

In Apple's defense executive director of Public Radio Exchange Jake Shapiro has said, "one of Apple’s major objections has been that if donations were to go through its payment mechanism, it would have to be in the business of managing and distributing funds and verifying charities as well." That argument does make sense being that Apple is a computer and online music retailer, it may be difficult and costly to have to manage the distribution of money in an industry it is not familiar with.

But is that the only issue? Following the earthquake in Haiti, Apple solicited donations for the American Red Cross through iTunes showing that they can be an intermediary for charitable giving. This seems to lead that another large aspect of this issue is money. Apple currently takes a 30% cut from its App Store transactions which would likely not be seen as a fair amount to take from nonprofits as a cost of doing business.


If it is a money issue, hopefully Apple and nonprofits can work out a way that people can use apps to easily donate to charity. That way both the causes being supported can benefit from increased funding and Apple can benefit from being seen as a company doing the right thing.

It's Not Just What You're Buying...

...It's what you're buying into. That is a quote from renown philosopher Slavoj Zizek referencing the campaign ran by Starbucks in a video that my roommate put on my Facebook page. My roommate found this talk entitled First As Tragedy, Then As Farce on theRSA.org web site. In this animated portion of his talk, Zizek investigates the surprising ethical implications of charitable giving.

 In this talk he examines our current economic capitalism, which he calls cultural capitalism. He talks about the necessity to bring consumption and anti-consumption together by having the desire to support good causes already included in consumption. Zizek then describes the existence of such practices by saying that if you go to any Starbucks Coffee, "when you buy Starbucks whether you realize it or not you are buying into something bigger than a cup of coffee. You are buying into coffee ethics. Through the Shared Planet Program, we at Starbucks buy more fair trade coffee than any other company in the world ensuring that the farmers who grow the beans receive a fair price for their hard work."

More than just talk about companies like Starbucks and TOM's Shoes, Zizek describes himself as misanthropic and says how charity is not the cure of the disease of poverty. He says that this remedy is part of the disease. These are admirable but misdirected intentions only prolong the suffering. "The real is aim is to try and reconstruct society on such a basis that poverty will be impossible," is a very bold statement just like "charity degrades and demoralizes." Though Zizek is clear to mention that giving is not inherently bad, it is much better than doing nothing. All in all it is a very thought provoking speech and I would encourage you to watch it.

In addition to the animated version, here is the speech in its entirety:

Cause Marketing Halo Awards

This blog entry is the first of hopefully many entries regarding responsible business and how it relates to marketing. Cause Marketing Forum has opened the submission period for campaigns conducted in 2010. CSRwire.com describes it as "North America's highest cause marketing honor...[to] recognize nonprofit organizations, businesses and agencies for excellence in initiatives that do well by doing good."

According to the Cause Marketing Forum, "outstanding companies and causes will compete in the following categories:
    •    Best Transactional Campaign
    •    Best Message-Focused Campaign
    •    Best Health-Related Campaign
    •    Best Environmental or Animal Campaign
    •    Best Social Service or Education Campaign
    •    Best Digital Marketing Campaign
    •    Best Event Marketing Campaign
    •    Best Video Creative
    •    Best Print Creative"

A few noteworthy winners from last year include The Cheesecake Factory and Feeding America's Drive Out Hunger tour for Best Cause Event Marketing and SunChips for Best Online Video. The Cheesecake Factory partnered with Feeding America to do a 30 city tour in 30 days to raise awareness for domestic hunger and collect cans of soup-- over 300,000 cans. People who donated received a free slice of Cheesecake Factory cheesecake. Here is a video of the campaign:

SunChips, a division of FritoLay, debuted its commercial the eve before Earth Day during a broadcast of American Idol. This commercial showed the world's first fully compostable chip packaging. by showing "a bag disapear through time-lapse photography." Check it out:

Target

Target is a company that stands out in the way that it does business. Instead of relying on a Wal-Mart type strategy of always getting the lowest cost no matter what the consequences, Target has been able to do business in a way that allows it to give back. And when one looks at how much Target contributes, it is clear to see that this company deserves some recognition.

According to the Company Information section of Target's website, the community outreach efforts are divided into seven sections: reading & education, volunteerism, arts & culture, social services, crisis relief, grants, and military & veteran support.

Reading is a big focus for Target with their website saying: "Since 1962, Target has committed 5% of its income to support communities. Today, that totals more than $3 million in giving every week. We're excited to announce a new chapter of that commitment: our pledge of $500 million by the end of 2015 to support education and help kids learn to read. This will be the largest gift in our history, bringing our legacy of giving to education to $1 billion."

Five percent may not seem like all that much of a contribution but for a company the size of Target that adds up to a lot of money donated to worthy causes. Target also has a system set up where customers can do their part to help donate. Its called Take Charge of Education. By using their REDcards, Target customers can choose which schools they would like to receive donations and Target donates one percent of the customers' purchases to those schools. This giving opportunity was also highlighted by Global Learning Charter Public School.

All in all Target is a for profit company that has implemented some easy steps that are making a big impact on the communities that Target is a part of. The amount of money that has been given back is growing, just like the company itself.

Good for Society or Good for Business?

There seems to be two sides in choosing what is the priority that businesses should be after. There are those who see corporate social responsibility as important and there are others who see it as getting in the way of the bottom line. In a Management Report and Governance Report in 2007 Nestle claimed that it is vital  to "create value, not only for its shareholders but also for society." But there are also those like UC Berkley professor David Vogel who wrote in Forbes, "To assume that the business environment has fundamentally changed and that we are entering a new world in which CSR has become critical to the success of all or even most firms is misinformed."

So which is it? Or can it be both? Todd Thomas writes in Is Corporate Social Responsibility Good for Business? on Execdigital.com that choosing one of the other is the wrong approach. Thomas says that companies don't have to choose between return on investment or responsibility. He states, "if one assumes that business society and the greater society are intricately linked, and that the corporate world is looking for long-term success and brand enhancement, CSR is a competitive advantage."

One of the main strengths of CSR is its connection with innovation. Giving back and being innovative are what investors, consumers, and employees look for in a company and the two can go hand in hand. Partnering with other organizations, contributing a percentage of revenue, and developing employee volunteer activities are some of the innovative examples that Thomas gives as ways for a company to practice responsible business. In addition to making a positive impact on the community, these companies can make a positive impact on their own business. It can strengthen the bond employees have to the company, provide a differentiating factor between the company and its competitors, and provide beneficial public relations which can lead to future partnerships and increased sales.

Tough Times for Nonprofits

This recession is putting a strain on both ends of nonprofits these days. There are more people in need of the assistance offered but at the same time there are less resources to offer due to a decrease in government funding and individual donations. Shelly Banjo and S. Mitra Kalita wrote an article for the Wall Street Journal on this topic, saying that nonprofits "are undergoing a painful restructuring, including mergers, acquisitions, collaborations, cutbacks and closings."

Though donations had steadily been rising the last few decades, there has been a drop off in private donations as seen in the chart above. In 2008 private giving decreased by 6%, the most substantial decrease since USA Giving began tracking this information.

Though there are a lot of negative effects that are being compounded by tough economic times, there may be some positive outcomes to this situation. The reality of current circumstances has brought up the controversial issue of whether there are too many nonprofit organizations to effectively help people. Cutbacks have caused smaller organizations to merge together and in some cases it has allowed them to do things never before possible on their own. One such example is Big Brothers Big Sisters:

"The changes are not only making Big Brothers Big Sisters more efficient, but also attracting new donors, board members and participants. In the past three years, the organization has been able to double the number of children served in Chicago to 1,300 a year. In 2009, it expanded the board by six people and won a $346,000 grant from Atlantic Philanthropies to run mentoring programs for more than 300 new children. By running programs at other nonprofits or companies they partner with, the organization has generated $750,000 in new revenue."

TOM's Shoes

Though only founded in 2006, TOM's shoes probably won't be unheard of by anyone who might read this post. TOM's, which name comes from a hope for a better tomorrow, operates in a way they call One for One. For every pair of shoes someone buys, they donate a pair to child in need. Why shoes? As it says on Toms.com, "A leading cause of disease in developing countries is soil-transmitted diseases, which can penetrate the skin through bare feet. Wearing shoes can help prevent these diseases, and the long-term physical and cognitive harm they cause."

The business approach is simple yet brilliant. Appearing as a nonprofit company because of all the donating that TOM's does, it is in fact a for-profit company that makes money by selling its products. By doing so, TOM's doesn't have to rely on donations to keep providing children with shoes. This protects TOM's from the current dry spell in giving that nonprofits are going through in this recession. They can give away as many shoes as they can because of the sales revenue that keeps coming in.

ABC news did on a story on founder Blake Mycoskie and his company back in 2009 with an accompanying video that sums up this cause better than I can.

http://abcnews.go.com/video/playerIndex?id=8480316

Top Socially Responsible Companies

I thought that a list of companies that are accomplishing what I intend to write about would be a good way to start this blog. I recently read an article by Seth Fiegerman on Mainstreet.com entitled 10 Socially Responsible Companies that compiled a list based on charitable donations, environmentally friendly policies, and the fairness of hiring practices. The first three in the list have to do with donations to charity, the next three with hiring practices and the last three with environmental practices. There was also one wild card company who was not at the top of any of these three categories but instead had honorable mention in each. This list consisted of:

1. Abbott Laboratories
2. Tyson Foods
3. Pfizer
4. AT&T
5. Johnson & Johnson
6. Sodexo
7. Timberland
8. General Electric
9. Stonyfield
10. IBM

This list had some companies that I wouldn't have thought would make the cut and others that I had never heard of or had never considered belonging in this category.  They also ranged in industry and in ways of giving back but all are worth recognizing for their contributions to charity, progressive hiring practices, and environmental responsibility. The two that stand out the most to me are Pfizer and IBM, both of which I hadn't previously thought of as companies that give back. It is encouraging to see a company like Pfizer who is part of the very profitable pharmaceutical industry give so much money to charity. In 2009 it donated over $60 million which represents 24.2% of its total profits for the year. The second standout was the wild card for this list: IBM. Though this firm wasn't at the top of any of the three lists in ranked 2nd in green practices, 8th in diversity and donated almost $42 million in 2009.